Barclays warns: Tight physical supply of crude oil may lead to a new round of sharp price fluctuations

⑴ The latest report from Barclays indicates that global inventories have dropped to just 4.3 billion barrels, which is 200 million barrels below the seasonal average. ⑵ Oil flow from the Gulf region has decreased to 7–10 million barrels per day, compared to the pre-conflict level of 20 million barrels per day. ⑶ US onshore oil production growth has slowed to nearly zero. ⑷ The report states that there is hardly any evidence of a genuine breakthrough in diplomacy. ⑸ Current prices reflect hopes for a diplomatic breakthrough rather than the reality of tight physical supply. ⑹ The report suggests that relevant parties can guide the market with false headlines, but cannot conjure oil out of thin air.